No wonder SOME real estate agents give the whole industry a bad name!!!!!

[wylie]

I shall certainly keep you updated. Heard today that after two weeks, the appraisal came in a $750K to $800K. I fully expect it could easily achieve considerably over that, seeing what the market is doing, and considering the potential.

I am having a look at the letter offering $700K from the agent tomorrow, so will be able to find out if he is indeed a local agent as he told her.

Wylie

 

[wylie]

Update....

Saw the letter today and googled the "lovely young chap". He is indeed a commercial agent based in the city, but living in a very expensive street in the next suburb. He would certainly know that his initial offer was somewhere between $200K to $250K under market value, perhaps more.

Wylie

 

[superb]

I shall certainly keep you updated. Heard today that after two weeks, the appraisal came in a $750K to $800K. I fully expect it could easily achieve considerably over that, seeing what the market is doing, and considering the potential.

I am having a look at the letter offering $700K from the agent tomorrow, so will be able to find out if he is indeed a local agent as he told her.

Wylie

You mention "appraisal". These are usually given by real estate agents so I wouldnt trust the paper it was written on, especially if the agent giving the appraisal was the one that approached the lady in the first instance. I would only trust a proper "valuation" by a registered valuer but even these are usually conservative anyway so I would add about $100k valuation price anyway.

As an investor, this agent had a duty to himself to get the lowest possible price. As an agent, his duty is to get the highest possible price for the vendor. In any case, his professional duty as an agent would take precedence. His aim should have been to get her the highest possible price and this could only be done by presenting the property to the market. The honorable thing to do for this lady would have been to have her list it with him and then put it up for public auction. If he was interested, he should be happy to bid for it in a public auction but I suspect that he wouldn't be interested to bid because I suspect he knows that the property would fetch considerably more that his first or even second offer. The fact that he approached her privately not to list but to buy is unethical in itself purely because of the profession that he is in. He is also doing his agency a disservice by denying them the commission. To top it off he used his status as an agent to give the lady the impression that his offer was market value because of his knowlege of the local stock. Whats worse, he used his wife and child to pull on the lady's heartstrings in his attempt to achieve his goal.

I know of an incident a few months ago where there appeared to be some dodgy dealings occurring. I went to a few open for inspections for a property I was interested in. The brochure distributed indicated "agent interest". I asked the agent what did he think the going price would be and he said about mid sevens. This was over my price range but I thought I would attend the auction anyway. Sure enough, the property hit 730k and then was passed in. It was still on the market three weeks later so I rang the agent, told him I had attended the auction, and asked if it was still available and he said yes. I then enquired about the asking price and he said $760k. He asked me if I was interested and I said no because it was still a bit beyond my price range.

A couple of days later I was browsing www.homepriceguide.com.au and entered the suburb I was interested in for the past sales information. Imagine my suprise when I saw the very property I was interested in listed with a sold price of $820k? I rang the agent immediately and he confirmed the sold price of $820k, I did not disclose the fact that he had spoken to me a couple of days before and had given me an asking price of $760k. I find it very hard to believe that the agent had conducted a dutch auction with two or more buyers that brought the sale price 60k over the asking price. Particularly in this market. Do you think this is possible?

 

[wylie]

House sold today

Thought I would update this thread.

Today my ex-neighbour's house was sold at auction. At least 10 registered bidders, not sure how many registered about seven bidding. Back yard full of people.

I would love to know if the "lovely young chap" who is a commercial real estate agent in the city, but who lives in a very expensive street down the hill, and who offered her $550K to $600K was at the auction because it sold for $850K.

He would have happily bought from an 88 year old blind and frail lady if he could have, and fleeced her to the tune of $300K. Just as well she has her "smarts", even though she still thought he was "lovely".

Anyway, she was a little emotional, has been in a nursing home, medium care, for about a month and today was the auction.

I believe if the house had been sold even one month ago, she may have received a higher price. This is because the house directly behind is for sale and is a post-war house sitting on a double block with uninterrupted city and river views. I know that someone who was interested in buying the ex-neighbour's house changed her mind because the gorgeous view is probably going to be at least partially lost when someone pulls down the house between her and the view and builds two houses to the full 8.5 metres.

Of course, that may not happen, but houses in the street are selling for up to $5M so the opportunity of building two new ones on the site of the old one would be the best use of the block behind hers. (Last double block in the street sold for over $3M I am told.)

Anyway, that is the end of the story. I still believe that "lovely young chap" was a scheming rat

 

[steveadl]

On a similar note, I'm seeing a lot of houses lately where they have been bought directly from the seller ie. they were never advertised, and then flipped a few months later for a tidy profit. Now of course some of these would be between families etc. then to market - but not all of them.

So I guess it is common practice for people 'in the know' in the realestate game to go around making offers on properties they think have potential.

Went to an auction today where a developer bought it in November 07 off market for $330k and just sold it for $394k. Ok not the same figures as you're talking in your example Lizzie, but you get the idea. I've seen quite a few examples of this lately.

I guess it's not a bad idea, although more for a hot market than stable one. If you see an area that has potential, do a letterbox drop, and out of 200 leaflets, you may have one (?) person get back to you? Then out of every 10 that get back to you might succeed with 1 purchase? (these are just total guess figures)

 

[Ahmad Azimi]

It is not illegal for a REA to organise private deals, they are allowed to buy property also. However (big however) it is a requirement that vendors be informed (in writing upon the contract) that they are a REA and that the vendor is aware of this. It does not sound like the house is listed, so knocking on doors seeking a private deal is not against the code of conduct.

Trying to buy privately when the property is already listed though, would be distinctly dodgy and this would fall into the bounds of unethical behaviour. Looks like he is showing initiative in the purchase method, but showing definite poor form in the price, whether he is a salesman or not.
BTW, a Real Estate Agent is NOT the same as a salesman, a REA is a license holder, a salesman works for a REA. They are different things.

I think you're right Alanna. I dont see anything wrong with that either. He's just trying to get himself a good deal as any other buyer would want to do. Just because the lady is disabled doesnt mean he should be paying 200k extra than he wants to or can afford. At the end of the day it's still that lady's decision whether she wants to sell or not. If she's concerned about the price she can always get a valuation done. As a buyer his main concern is himself and not the vendor.

I think some people are way over reacting in here.

 

[yo yo ma]

Here is a very similar story to the original post...

SMH: A question of values

On October 24, Mrs Dick's next-door neighbour, developer Keith Sweeney, purchased her home for $825,000 after an estate agent, Robert Marks, doorknocked immediate residents telling them it was for sale. Mr Sweeney then sold it on November 2 for $1.2 million - netting a $375,000 profit. He arranged for both settlements to take place on the same day - December 7.

 

[ianvestor]

Hey guess what? Most businesses aim to buy low and sell high.

The shirt you buy for $100 probably costs the store less than $20.

I don't see what's so different/wrong with trading property rather than trading shirts.

That guy basically sold his knowledge and experience for $375k. Good on him. No-one was forced into either transaction.